Volkswagen Shows Environmental Side

GENEVA – Volkswagen AG is serious about sustainable mobility, evidenced by a pledge made by Chairman Bernd Pischetsrieder and the pride with which the auto maker touts its diesel-powered Polo BlueMotion.

Outlining a 3-point program to journalists, Pischetsrieder, who also chose the 2005 Greater Los Angeles Auto Show to champion alternative-fuel technologies, promises:

VW Polo BlueMotion

“Don't worry,” Pischetsrieder says. “(You) have not been spirited away to a meeting of Wolfsburg, (Germany's) friends of nature association.

“But we can't ignore the signs of the times. Even if oil will remain the key source of energy for the foreseeable future, there is, nevertheless, growing evidence that the fossil-fuel era has passed its peak.”

This represents opportunity for auto makers, not doom and gloom, he adds, pointing to the Polo BlueMotion, a product of VW's BlueMotion sustainable mobility initiative.

The Polo BlueMotion debuts here at the Geneva Motor Show and features a 1.4L 3-cyl. TDI powerplant that generates 80 hp and 144 lb.-ft. (195 Nm) of torque between 1,800 and 2,200 rpm.

The Polo BlueMotion will go on sale in Europe this year, with a starting price under €15,900 ($19,000).

“The resources we depend on have reached the limits of their seemingly boundless availability,” Pischetsrieder warns. “More important still: The environmental burden cannot increase any further.”

Meanwhile, Volkswagen Brand Group Chairman Wolfgang Bernhard met with analysts.

“Bernhard repeated the VW Group's objective of achieving a €4 billion ($4.8 billion) improvement in pre-tax profit in 2008 over 2004, giving a €5.1 billion ($6.1 billion) pre-tax result,” writes Merrill Lynch analyst Stephen Reitman in a research note published today.

Reitman says Bernhard also reiterated the company's capital expenditure target of less than 6% of revenue and expectations for a positive net automotive cashflow.

But Bernhard also “chided a number of questioners for failing to understand that one cannot dictate in a negotiation,” Reitman says, referring to restructuring talks with labor unions representing VW workers, who are among the most highly paid in the world.

“We feel this was an admission that VW had to tread lightly with its dance floor partner, namely organized labor,” Reitman says.

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